Downloaders Beware

The intellectual property law issues behind illegal movie downloading are more complex than what the media is currently reporting, Sandy Zhang writes.

A recent media report warned anyone who has downloaded, or uploaded movies, TV shows and music, to “be very scared”.

It cited the recently signed Trans-Pacific Partnership (TPP) Agreement, claiming rights holders such as Hollywood studios could soon be able to sue downloaders for lots of money. It stated the agreement would force internet service providers (ISPs) to hand over the details of illegal downloaders to the rights holders, and track and monitor persistent pirates.

It further claimed the document wants all the countries involved to change their laws to make it easier for the studios to pursue copyright infringers for pre-established damages.

This type of doomsday reporting in the wake of new legal developments is common, but in this case it is not true.

The TPP agreement is an international treaty that attempts to bring consistency to certain areas of law in a number of countries. It has been the subject of some public scrutiny and criticism, and a proper analysis will result in a lengthy article in itself. However, whatever could be said about the nature of the TPP agreement, having a requirement in the agreement does not necessarily mean it is a new requirement for the Australian legal system, and the agreement certainly does not go as far as what was claimed in the media report.

The media report talks of a “pre-established damages” framework with the agreement mandating either a pre-established damages system or an additional damages system.

Australia already has an additional damages system, so we satisfy that TPP requirement for copyright-related damages. In any case, I don’t see Australia introducing pre-established damages. It has always been the approach of Australian Courts to decide each case with regard to all the relevant circumstances of that particular case.

The TPP agreement also does not force ISPs to actively track down pirates and does not force the ISPs to bear the costs for any schemes.

In the USA there is a risk an individual could face huge damages for relatively minor infringements. The Dallas Buyers Club case in Australia is a test here for the rights holders.

Dallas Buyers Club has now concluded somewhat unsatisfactorily for the rights holders. While it was granted rights to obtain details of illegal downloaders from ISPs, this was under the condition that it will only make claims for the price of a copy of the movie and the costs of obtaining the infringer’s details. Other claims put forward by Dallas Buyers Club were rejected by the judge, and to ensure that Dallas Buyers Club (being a foreign company without substantial assets in Australia) will abide by the condition, the judge also imposed a $600,000 bond for Dallas Buyers Club to obtain the downloader’s details. As a result Dallas Buyers Club has now decided to abandon its case. Nevertheless, it must be remembered that local rights holders with substantial Australian assets taking similar legal steps may not be subject to a bond, so this may not prove a barrier to them.

It is at least clear now that Australian courts are likely to award damages to reflect only the price of the number of copies of films downloaded plus the cost of obtaining the person’s details for the claim. This would include court costs, which would be split between proven infringers. Depending on the number of proven infringers, average Australians might have to pay between a few hundred to a few thousand dollars for downloading a movie. This would still not be a small sum for many, but it is much more reasonable compared to the figures awarded in the US.

It should be noted that downloading copyrighted material without authorisation is not legal, although usually not in a criminal sense unless you are distributing copies to others for profit. For the average Australian, what they face is legal action from the rights holders.

If you receive a demand letter claiming you have infringed copyright when you believe that you haven’t, you may have to prepare evidence to show that you did not download the movie. Having a legal copy of what you were accused of downloading is an argument. Whatever your stance, do not ignore any demand letters.

People who download from sites such as YouTube won’t be hit with copyright actions because it is nearly impossible for YouTube to differentiate between viewing and downloading from its perspective. However, downloading a YouTube video intended to be streamed is still a breach of the uploader’s rights.

A person’s risk increases if they upload a movie to a site for unauthorised sharing (regardless of whether it is BitTorrent or YouTube). They may not be directly distributing the film to people, but the upload may enable hundreds of people to view or copy the film. Even if it was not for commercial gain, there is a risk of significant liability potentially in the range of tens of thousands of dollars.

It is also irrelevant whether a show or movie is available on free-to-air TV. A copy downloaded illegally is not authorised by the owners / rights holders. A film on free-to-air TV is there because a TV station purchased rights to air it, and a free-to-air TV station chooses to air content for free in order to generate advertising revenue.

The fundamental problem with piracy is that the downloader gets it for free but deprives everyone else (including producers, actors, distributors, TV stations etc) of any income from it – barring, perhaps, the piracy website operator. In a sense, many of the piracy websites operate a model similar to a free-to-air TV station, in that they tend to seek advertising revenue for themselves on their website through offering free movies. The difference, of course, is that they did not pay for any licences, have obtained copies of movies either without cost or at the cost of one retail copy, and simply proceeded on that basis to engage in mass-distribution.

While the outcome of the Dallas Buyers Club action in Australia has been less than ideal for the rights holders in terms of compensation from downloaders directly, it is not the only solution that the rights holders have been seeking in Australia.

For example, new site-blocking laws enacted by the Copyright Amendment (Online Infringement) Bill 2015, which came into force in the middle of last year, is now about to be tested. The new laws allow rights holders to apply to the Court for an injunction to take reasonable steps to disable access to an infringing website. A first attempt in utilising these new laws to force ISP intervention has been filed in the Australian Federal Court by Village Roadshow and a number of other rights holders.

It is evident that piracy in Australia is now under assault from all sides. True, the average Australian illegal downloader faces much more reasonable damages than their US counterparts. However, the potential for damages of several thousands of dollars is still not something to be ignored. One should also not forget that such a sum would purchase hundreds of movies or years of online content-streaming subscriptions. Further, site-blocking legislation in Australia together with a general movement against piracy websites means that an illegal downloader’s options will continue to shrink while the emergence of new, convenient and affordable alternatives to entertainment consumption means legal options will continue to expand. Australia is facing interesting times ahead indeed, and for Australian illegal downloaders there is perhaps no better time than the present to switch to legal options.

Sandy Zhang is an intellectual property lawyer with Brisbane firm Bennett & Philp Lawyers. With an added background in IT and industry experience in web design and database design, Sandy is well equipped to practice in the Intellectual Property area at Bennett & Philp. Sandy’s studies and practical experience provide him with a sound understanding of both the legal and commercial side of an Intellectual Property matter, enabling him to provide sensible and practical advice. Sandy maintains a keen interest in the IT field and regularly acts for software and Internet-based clients. He is also a native speaker of Chinese Mandarin and can read and write Chinese.